the view on the last budget season

As was to be expected, 2023 was a stellar year for large Italian banks, which benefited from the rate hike implemented by the European Central Bank (ECB) to generate profits and increase distribution to shareholders, after having offloaded impaired loans and improved balance sheets in previous years. Although with differentiations dictated by different sizes and different paths in recent years, none of the five largest Italian commercial banks – UniCredit, Intesa Sanpaolo, Banco BPM, BPER Banca and Banca Monte dei Paschi di Siena – disappointed expectations last year , according to what emerged from the annual financial statements published this week.

UniCredit: reserves 100% of the profit to shareholders

She was the first to reveal the accounts UniCreditwhich also recorded the best stock market performance of the FTSE MIB in 2023, galvanized by the care of the CEO Andrea Orcel. The institute in Piazza Gae Aulenti closed the year with a net profit of 8.61 billion euros, up more than 50% compared to 2022. Revenues amounted to €23.8 billion, supported by a solid net interest income (NII) of €14 billion – driven by the rising cost of money – and by resilient commissions amounting to 7.5 billion euros despite the adverse macroeconomic scenario. What convinced analysts and investors was, as usual, the generous distribution: the bank intends to distribute 100% of the 2023 net profit to shareholders, including dividends and buybacks and, starting this year, it will introduce a distribution policy ordinary with a payout of at least 90% of net profit. “We face the future with optimism,” Orcel said, explaining that “2024 will be a year of normalization” and that the bank is “in an enviable position to continue to move effectively in an uncertain environment.”

Intesa Sanpaolo: doubles dividend and announces buyback

Excellent accounts also for Intesa Sanpaolowhich closed 2023 with a net profit of 7.72 billion euros, growing by 76.4% over 2022 thanks to the dynamics of net interests, which has led to a net profit prospect for this year and next of more than 8 billion, as well as a proposed dividend almost double compared to year before. The bank also announced its intention to proceed next June with a buyback equal to approximately 55 cents of a Cet1 point as of 31 December. A total dividend amount of 5.4 billion will be proposed at the budget meeting, of which 2.6 billion has already been paid in November as an advance. The overall dividend per share for 2023 is 29.60 euro cents, almost double compared to 16.39 cents in 2022. The CEO Carlo Messina highlighted that the “bank is the first in Europe in terms of dividend yield” and that “of these approximately 40% is intended for Italian families and our shareholder foundations, allowing important social interventions in the territories they belong to”.

BPER: “excellent” results beyond the economic situation

BPER instead it closed 2023 with a consolidated net profit of 1.52 billion euros (+4.87%) and an interest margin of 3,251.8 million euros (+78.1% y/y), growing for eight consecutive quarters thanks in particular to the increase in the commercial spread resulting from the increase in interest rates. The CEO Piero Luigi Montani he spoke of “excellent results” and “which go well beyond the favorable situation of the Italian banking system”, also because BPER has been busy in recent years in completing two important M&A operations (Intesa-UBI and Banca Carige branches). In the call with analysts, Montani also underlined the progression of the dividend in the plan: “We started with 6 cents, then 12 cents and now 30 cents. We had made a plan with a growth trend and pay-out of 50% to 2025, and therefore we are even ahead of schedule.”

Banco BPM: profit exceeds guidance

BPM desk posted a net profit increase of 85% a 1.26 billion euros and a dividend of 56 cents per share, an increase of 143% compared to that distributed on the 2022 results. The overall distribution amounted to 848 million, approximately 100 million above the guidance. The positive numbers also dispel the background on the marriage with Unicredit. “With the new strategic plan we have embarked on a path which, in our ambitions, will lead us on the one hand to establish an income statement structure that supports the systematic creation of value for all stakeholders, on the other to consolidate our position as third party banking hub,” said the CEO Giuseppe Castagna.

MPS: the dividend returns

Positive surprises too Banca Monte dei Paschi di Siena, which has returned to distributing a dividend, two years ahead of schedule and 13 years after the last coupon. Net profit in the last quarter of 2023 amounted to 1.123 billion, after 466 million “of net releases of provisions for risks and charges” and a positive net effect of taxes of 339 million euros, with the profit of ‘entire year that has thus reached i 2.05 billion euros, compared to a loss of 178 million euros the year before. The CEO Luigi Lovaglio has ruled out at the moment using buybacks to remunerate shareholders, favoring dividends.